macavity_

I'm very confused right now. I called last week to ask for a contactless version of my Citi card. After being put on hold so the rep could do some research, she returned and told me that yes, they would be mailing out a new contactless card to me right away!
Of course, I receive the mail and open it up just to find... the same non-contactless card that I already have.

Somewhere they made a mistake, but is it that they don't have contactless cards at all? I will try calling them tomorrow when I get back to the states but wondering if that'd be a waste of time ...

mia

Welcome to Flyertalk.

The Citi Costco co-branded cards are contactless. To my knowledge, no other cards are offered with the contactless option. Previously, Citi offered a contactless sticker with some cards, but that was phased out. (The sticker was intended to be affixed to your phone, but of course many phones now have built-in contactless payment options.)

CarefulBuilder14

I find Citi's approach very illogical.

I PCed my AA Platinum to Costco in early 2017. I don't think I've ever had the Costco card replaced, and it is contactless. That suggests Citi has been making Costco cards contactless since at least early 2017 (and possibly mid-2016).

In the summer of 2017, Citi makes a big deal of the metal-ish cards and sends out replacements, even to customers who don't request one.

Yet do they take this ideal opportunity to add a feature from a no-AF card to their supposedly premium product? No.

mia

The Citi Costco card had the contactless feature from the outset. I assume this is something that Costco or VISA specified, but that Citi otherwise thinks is unimportant.

tmiw

I have a suspicion (though I'm not sure if this is actually the case) that Americans in general are not fans of contactless cards. There was a bit of a controversy a decade ago regarding their security and that might have some lingering effects even now. Then again, if that were the case I'm not sure why Costco and/or Citi would even want the PR hit by including it on that card.

Other possibilities include them not being worth the extra cost to make (considering that mobile wallets are already not all that popular and merchant support is still not 100%), not wanting to cut into mobile wallet usage and simply not being a high priority for Citi/other issuers. Only the issuers* really know for sure.

* I say "issuers" here because contactless cards are fairly rare in the US, not just with Citi. Even AmEx, arguably the largest issuer of them, mostly only does so on an opt-in basis.

CarefulBuilder14

Yes, I vaguely recall some scare pieces in the news.

As far as how it ended up on Costco of all cards...maybe Costco USA plans on upgrading terminals eventually? Maybe they want some uniformity in how customers pay when at a foreign Costco? The card was launched with a FTF (foreign Costco locations excepted, now no FTF) so it might not have been about trying to become a general travel card).

Capital One might be the biggest issuer of contactless cards (as measured by enabled cards in use) in the USA. Smaller than Amex or Citi, but (according to spotterswiki) they include it on all major non-rebuilder products (Venture, Venture One, QS, Savor) by default.

krazykanuck

It is a bit peculiar, especially since I think the US is the only country where Visa is the only permitted credit card, to my knowledge. You try and tap a Citi Costco card in Canada and you'll be met with an error as they're Mastercard only. You'll also probably entertain the cashier who might be perplexed by your foreign membership card.

Which I don't understand. Having recently returned from Australia where virtually everywhere has a contactless capable terminal, my Citi Costco card saved me so much time and hassle, because using a normal US card would force a signature slip. I had one of the old Amex cards that was contactless by default in college. It was handy at the 1 merchant that accepted it. I think the issue is that merchants don't want to pay to upgrade their tech, and issuers don't want to pay to create contactless cards.

tmiw

The terminals that are used inside definitely can support NFC, it's just not turned on right now (for reasons similar to why a lot of other retailers haven't bothered). That said, I suspect it's coming soon since the gas pumps are also getting NFC readers.

True, but that's a fairly recent development and it will still take at least a couple of years for the cards currently in the field to cycle out.

I don't blame issuers for being hesitant this time around. To them it's basically a "failed" technology, especially since there's something supposedly "better" than just tapping a card.

As for merchants, many already do support them. The US market has unique issues, however, that make contactless a much harder sell overall:

1. High interchange relative to other countries means merchants are hesitant to encourage card use. Most businesses accept them, of course, but that's mainly due to decades of conditioning the buying public to use them; it's a much harder sell in 2018 (compared to, say, the early 2000s or earlier) to stop accepting cards, or even open a new business and only accept cash.
2. Heavy reliance on custom software--both at the POS level and on terminals themselves--means that a business possibly has to extend significant effort to enable NFC. They aren't going to go out of their way to do that if there's no mandate from the networks and there's no customer demand.
3. Entire merchant categories where it's unusual or even frowned upon for customers to use payment terminals/run cards themselves. Restaurants are a big example of this, as even the chip-enabled ones generally have not adopted pay at the table systems as has happened elsewhere.
4. Inserting/swiping is simply not a huge deal to customers, especially since chip processing has improved and signature is going away.
5. Security concerns, as alluded to above. But also concerns with mobile wallet security are affecting adoption of those.

In short, I suspect there'll have to be huge incentives for both merchants (e.g. significantly reduced interchange for all NFC transactions) and customers (increased rewards for mobile wallet transactions like what US Bank offers) for adoption to get close to what it is elsewhere. And even then those incentives may need to be offered for quite a long time as the US in general seems to be slow to pick up banking tech.

CarefulBuilder14

True...and Costco could hardly expect Americans in Canada to have, by sheer coincidence, a contactless MC. So probably not about uniformity in NFC acceptance.